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I do not purport to be an economist nor would I ever want to be. Theirs is a world of implicit assumptions and pseudoscience that only a brave few have challenged from within. However, theirs is also a discipline that in theory and practice can shape the fate of millions, which is why I pay more than casual attention to them. Thus it is that I came to ponder the financial situation in Greece, a place that I lived in in 2010 at the start of its downward slope towards the current moment (my wife has researched and written on matters of Greek political economy and I have an interest in Greek civil-military relations, so our stay was mutually beneficial). Here is my non-expert view of things.

When lenders charge interest on principal loaned, they prefer to have the interest paid rather than the principal. This loan repayment rationale, which is true for states, firms and individuals, keeps the debtor beholden to the lender so long as the principal remains unpaid. Over time, the interest accrued can well exceed the amount lent, which is perfectly fine from the lenders point of view but keeps the debtor permanently saddled in a cycle of interest payment unless the debtor earns additional income (revenue) that can be directed towards paying down the principal. Short of a lottery win, a pay raise or new sources of revenue, debtors on relatively fixed incomes are locked into the cycle of debt.

Greece is in that situation. Until 2008 it was servicing the interest payments on its debt to international lenders (mostly the European Central Bank, various national banks and private investors). Then the international financial crisis of 2008-09 hit, which had nothing to do with Greece per se but which drove up interest rates. With a stagnant economy and flat tax revenues, Greece quickly found itself unable to make interest payments and, in a dramatic revelation, announced in 2010 that it had been systematically underestimating its fiscal deficit in order to maintain interest payments on its debt at a sustainable rate. At that point many private investors dumped their Greek debt holdings and the IMF assumed a significant portion of them as well as some of that accrued by European public banks.

The Greeks were subsequently offered two “bailout” loans that allowed them to continue to pay the interest on their debt, which together with the principal now amounts to nearly 250 billion Euros. With interest set at approximately 4 percent annually, the figure is set to reach the half trillion euro mark in a few years. Even if interest rates were capped at zero, it is estimated that it would take Greece 81 years to repay the amount currently owed.

There are several questions arising from the Greek debt. Why, since the interest paid is now more than the principal borrowed, does not the ECB and IMF put a cap on the debt? Why did investors continue to offer loans to Greece when it turned out that the Greeks were fiddling the books, and that neither the principal or the repayment loans ever trickled down to the general public in terms of public goods and services? Why does it expect the Greek population to pay via austerity for the risky borrowing of Greek elites and the even riskier lending of European banks?

Asking the Greek people to shoulder the burden of austerity–in a country with 30 percent general unemployment and 50 percent unemployment for those under 30, with a massive brain drain of educated professionals, porous borders and deep cuts to public sector salaries, pensions and basic services–is akin to forcing the children of crack addicts to starve and swab floors in order to pay for the rehab treatment of their parents. And the outcome is just as uncertain.

Let’s look at it this way. Capitalism is about assuming risk for higher reward. In the financial world, the riskier the investment the higher the interest paid on it. And just like quick finance and pawn shops are located in poor rather than rich neighbourhoods, high interest bonds are issued on “risky” countries with poor credit ratings and histories of financial instability. For “courageous” investors riding the line between high interest and junk bonds, the rewards for so-called bailouts are great. But the downside of a default is that they will have to wear losses, just as many ill-advised investors have to.

Greece is one such high risk place and those who lent to it knew this from the beginning.

With that in mind is is easy to see that the behaviour of the “troika” (the European Commission, European Central Bank and IMF) can be (and has been) likened to loansharking and needs to be treated as such. When people seek debt relief from loansharks, banks or credit card providers, they arrange to repay a capped sum and a payment schedule is established. The alternative is bankruptcy, which leaves the creditor with nothing. Although suboptimal from the lender’s point of view, the capped payment alternative is better than nothing.

When it comes to states, the decision to cap debt is a political decision, not a financial one. That is because the stability of states is more important than the returns on risky investment, especially when ample returns have already been received, many creditors are no longer at risk and demands for future returns put state stability at peril. In the case of Greece there is a twist, in that the referendum on whether to accept austerity was the first political iteration in a multi-step process. Now that the Greeks have refused more austerity, it is the turn of the EC to make a political decision of its own.

Let’s be clear: this is not a Greek crisis; it is a crisis of European finance capital. The demand for more Greek austerity is not about servicing the debt but about humiliation, punishment and deterrence of others who might dare to do the same.

The people who should seek answers are those who invested in the agencies that undertook the high risk lending strategies that have brought us to this moment. The people who are responsible for the crisis are not average Greeks but suits sitting in fancy offices in Athens, Brussels, Frankfurt and London. They are the ones who took the risk on Greece and they are the ones who need to be held to account.

This does not absolve Greeks from their own mistakes. Certainly the culture of entitlement and the pervasive corruption in Greek society needs to be addressed. But here again, this was well known to foreign creditors at the time they lent money to Greece, and for all the everyday petty corruption in Greece involving phantom war veterans and people faking disabilities, it is the Greek political-economic elite who elevated institutional corruption to an art form. Syriza proposes to confront them as well as the lower-level scams but in order to do so it must show that it can negotiate a debt payment agreement that puts the interests of average Greeks first.

There is a way out of the imbroglio that can leave Greece in the EU without undergoing more austerity punishment. In international law there is a concept known as “odious debt.” Odious debts are those that are incurred by governments that do not go to their stated purposes or are ill-gotten from the onset. Under international law, odious debts are the responsibility of the incurring parties and are not the responsibility of their successors. As such, they do not have to be serviced by others if the responsible parties cannot be made to pay.

One can argue that the debt incurred by pre-Syriza governments from 1999-2008 fall into the odious debt category and should be forgiven as such. If anything the political parties in government during the time the debts were incurred can be sued for repayment (these being the Panhellenic Socialist Party (PASOK) and New Democracy (ND)). Whatever happens, it is clear that Greece has not seen the purported benefits of the loans incurred by previous governments (to include the now abandoned or derelict Olympic facilities) but it has paid more than its fair share of interest on them. By any reasonable measure the remaining debt is now odious.

In the end this is a cautionary tale with minor and major sub-plots. The minor plot is about sustainable debt and the limits of debt relief. The major plot is about the perils of political union. The EU needs to understand that how it addresses the minor plot will determine the conclusion of the major one.

Bonus read: Although I do not agree with some of his observations, Brian Easton has a nice short piece on the Greek situation here.

This week I attended a talk by Kiwi journalist Yasmine Ryan, currently based in Tunis. Yasmine previously worked for al-Jazeera and now freelances from her Tunisian base. Her talk was about the state of affairs in the Arab world, and more specifically, North Africa.

She had many interesting things to say but I garnered three main points from her talk. First, the the so-called Arab Spring has failed to open Arab politics in any meaningful way. Second, levels of corruption in the Arab world are so high and so pervasive that reform is virtually impossible, especially when foreign interests back the entrenched power elites. Third, state capacity (measured by public infrastructural development, enforcement of norms beyond simple repression and provision of goods and services) is woefully lacking throughout the region, something that contributes to pervasive discontent amongst disempowered groups.

Her bottom line was that although Tunisia is touted as an Arab Spring success story, it is in fact not and yet is the best of a sorry lot of post-dictatorial regimes now governing in North Africa.

As Yasmine spoke, I found myself pondering her use of words. She referred to the Tunisian “revolution” and to the “democratisation” of Arab politics. Her use of these terms reflects standard journalistic practice although she knows well that nothing of the sort has happened in North Africa. Let me explain why.

“Revolutions” properly conceived are popular uprisings that lead to the armed overthrow of the state and the imposition of a paradigmatic change on society under a new political regime in the wake of the overthrow. The first key to revolutionary success is victory over the repressive apparatus, either as a result of combat or because the repressive apparatus switches its allegiances to the new sovereign contenders. The second key to revolutionary success is the scope of paradigmatic change covering political society, civil society and the economic structure of the nation-state. Needless to say, none of this happened as a result of the so-called Arab Spring.

So what did happen? Well, if revolution does not eventuate and democracy does not obtain, then other outcomes are possible. The regime being challenged can use its repressive superiority to reassert its authority and crack down on dissent, thereby quashing the seeds of popular uprising. This occurred in Bahrain, although it took Saudi Arabian troops to help repress the mostly Shiia uprising against the Sunni elite in that country. To a lesser extent it occurred in the 2009-10 election protests and the 2011-12 Arab Spring-inspired “Day of Rage” protests in Iran.

Another alternative outcome is a civil war where the challenged regime is forced into an armed struggle with rebel groups or in which the old regime is overthrown but new power contenders fight each other in order to establish their claim to being the new sovereign. The former is happening in Syria and the latter is happening in Libya. Iraq is a variation on this, with foreign intervention rather than popular unrest being the gateway (if not cause) for post-authoritarian internecine violence marshalled along sectarian lines.

A third option is for the authoritarian regime being challenged to engage in what is known as a “passive revolution.” “Passive revolution” is where the regime elite adopts cosmetic changes and engages in reform-mongering to appease popular discontent but does not fundamentally alter the power elite or the institutional bases of their power. One of the cosmetic changes is electioneering rather than democratisation (which involves more than elections and encompasses institutional, social and economic life). This, sadly, is what has happened in Tunisia after the fall of Zine El Abidine Ben Ali and in Egypt after the respective ousters of Hosni Mubarak and Mohamed Morsi. In both cases the power elite underpinning the ousted authoritarian leaders regrouped under an electoral facade that allowed them to cloak their rule in a mantle of “democratic” legitimacy. In Egypt’s case the scenario had a twist in that Morsi was allowed to become the first freely elected president in Egyptian history, but when his Muslim Brotherhood government pushed its Islamicist-backed constitutional project and Morsi granted himself unlimited executive powers not subject to judicial or parliamentary review, they were deposed in a military coup. The leader of the coup and then head of the Egyptian military, Abdel Fattah el-Sisi, is now president of Egypt.

However, for a passive revolution to work it must, along with continuing to selectively repress dissent, deliver goods otherwise not obtained by the discontented masses. Be it as a short term or longer term strategy, the passive revolutionary approach is more than political window dressing because it hinges on giving the appearance of progressive change by providing public goods and services, and material benefits, that previously were unavailable. Yet, in Egypt as well as Tunisia, none of that has occurred because of rampant corruption, lack of state capacity, and an absence of economic opportunity under the power elites that ruled before the regime changes and who continue to rule today. What has occurred is the resumption of repression of those who wish to push for a further and more substantive political opening.

This means that the root causes of popular discontent remain unaddressed, which makes the passive revolutionary approach inherently weak. It is akin to putting a sticking plaster on an arterial bleed–it may staunch some short term dissent but it cannot contain the surge of discontent over the long term.

But there is a twist to the story. It turns out that Tunisia has supplied the largest contingent of foreign fighters to the Islamic State. Egypt also has proved to be a fertile recruiting ground for jihadists, and Libya is overrun with them fighting to overthrow the central government in Tripoli. Why would alienated individuals in Tunisia and Egypt opt to join a foreign war rather than continue to fight for progressive political change at home?

I believe the answer is that those who choose to leave to fight for IS or al-Qaeda see the results of the Arab Spring for what they really are: a reassertion of the traditional status quo under different guise. Understanding the impossibility of affecting significant political, social and economic change at home, these disaffected fighters migrate to foreign conflicts in which the enemy is clear (be it the West, Israel, Iran or Shiia Islam in general) and in which their skills in the management of organised violence can be honed for future use at home should they survive combat. Should they not, they will have died for what they believe to be a good cause.

That is the crux of the “returning jihadi” problem. They pose no existential threat to the West or even stable authoritarian regimes (barring an overreaction by the state and society that makes it appear as if there is in fact a “war” between Islam as a whole and the non-Islamic world). They do not pose an existential threat to stable Muslim dominant societies such as Indonesia and Malaysia. But they do pose a potential existential threat to the passive revolutionary regimes in North Africa as well as in failing or failed states such as Yemen, Somalia and/or those in which civil war is occurring (to include Nigeria even if Boko Harum is comprised of indigenous fighters who for the most part have not traveled abroad).

That is why I see al-Qaeda and the Islamic State as regional rather than global problems–they may have a world wide impact given the decentralised nature of terrorist tactics outside of the Middle East, but their real strategic impact stems from the existential threat they pose to the Middle East itself. After all, even if they use the US, the West, Israel and/or Iran as foils for their violent ambitions, al-Qaeda and IS have their eyes focused squarely on the Gulf petrolarchies as much if not more than they do on any other territorial and political objective.

In the end, it has been the failure of the Arab Spring to deliver on its theoretical promise and popular expectations for real change that has led to the rise of IS and the spreading wave of violent unrest throughout the Arab world. After a moment that promised a thawing of old political structures and the germination of new ideas about the relationship between state and society, the region has proven yet again to be barren ground for peaceful, progressive and lasting social change.

PS: Here is something I wrote in 2011 about Tunisia and other Middle Eastern transitions. Although I do not claim any particular expertise on the Middle East or Arab world, I think that by and large my observations of four years ago have stood the test of time.

In a previous life one of the US government roles I played was as co-team leader of the OSD/JCS Cuba Task Force. That was a combined team of officials and officers from the US Office of the Secretary of Defense (OSD) and Joint Chiefs of Staff (JCS) tasked with exploring contingency scenarios for Cuba, including refugee flows (then ongoing) as well as possible civil unrest and regime transition scenarios in the wake of the withdrawal of Soviet aid to the island nation and the increasingly geriatric nature of its original leadership. My co-team leader was a Cuban American political appointee, with the idea being that my academic experience studying authoritarian regime transitions and knowledge of the Cuban approach to irregular conflict would be balanced by his sensitivity to the domestic political implications of any moves we proposed to undertake.

Although I cannot reveal much of what we did, I can say a few things about the process that has now led to a normalisation of diplomatic relations between the US and Cuba.

First, almost everyone in the US government realised that the embargo was a failure. However, the Cuban lobby is on a par with the gun and Israel lobbies when it comes to single issue fixation and willingness to spend money for the cause. This made Cuba a thorny political problem for any US government trying to improve relations with it, as the usual suspects would (and still do) immediately hurl the “soft on communism” and “appeasing dictators” invective as part of their negative electoral campaigning. This placed the issue in the “too hard” basket as far as most politicians were concerned, especially given the myriad of other issues at play and the trade-offs they involved. As a foreign diplomat said in my presence when asked about the US approach to Cuba: “That is a domestic matter, not a diplomatic one.”

Secondly, from the 1980s to the present day, every former Chairman of the Joint Chiefs of Staff and the US Chamber of Commerce have repeatedly called for an end to the embargo and resumption of full diplomatic relations. One would have thought that the weight of conservative military leaders and the leading business organisation in the US would hold some sway, but in fact their views were trumped by the lobbying efforts described above. Episodic attempts have been made to launch US business initiatives in Cuba (for example, in agricultural machinery), but the legal and monetary costs of circumventing the embargo by using off-shore subsidiaries, etc. simply proved too much given the limited nature of the potential returns.

Third, as of the early 1990s the Castro brothers increasingly delegated authority to second generation leaders, who now have been replaced in large measure by third generation revolutionary cadres (people in their 40s and 50s). In fact, both the Cuban exile community as well as the revolutionary leadership have seen the physical decline of the so-called “dinosaurios” (dinosaurs) and their replacement with younger, often more moderate leaders who were not present during the revolution and who therefore do not all have personal scores to settle stemming from it. My co-team leader was second generation and not fuelled by the rabid thirst for revenge exhibited by many of his parent’s generation (some of whom I got the dubious pleasure of meeting). Now that second generation’s children are coming to the fore. This has opened the door for initiatives focused on normalising relations.

But the issue remains complex. The end of the Cold War and fall of the USSR actually reinforced the view in some US policy circles that an embargo could, given the withdrawal of Soviet aid to Cuba, bring the Castro regime to its knees. On the other hand, the increase in non-US foreign investment in Cuba after the Cold War (mostly but not exclusively in tourism) was seen by some in the US as making the embargo counter-productive when it came to promoting US business interests in its near abroad. Overlying these views was a persistent belief that Cuba continued to logistically and intellectually support Marxist-Leninist guerrilla groups in Latin America (including those that drug trafficked) as well as rogue regimes such as North Korea, Libya, Syria and Iran (to say nothing of Nicaragua and Venezuela). As a result, foreign policy opinion in the US after the Cold War remained very divided on the question of what to do with Cuba given the embargo and rudimentary diplomatic relations.

Yet given the demographic changes mentioned earlier, the question about Cuba the last twenty years has mostly been one of political timing: when is the opportune moment to make the move towards restoring normality to the bilateral relationship? Conventional wisdom on US presidential politics states that only during second terms can presidents get away with bold foreign policy initiatives, and even then they have to be popular and presiding over a strong economy in order to do so (since voters tend to ignore foreign policy issues when their pockets and bellies are full). However, owing to the perverse ideological evolution of the Republican Party, only Democrats would even contemplate doing so after 1990, which meant that it was left to Clinton or Obama to be bold (recall that Nixon opened the relationship with China and Reagan encouraged glasnost and perestroika, even if both Republican presidents did so for self-interested reasons).

I have little doubt that Clinton would have normalised relations with Cuba in his second term if he had not been hamstrung by the Lewinsky scandal, which helped turn the Elian Gonzalez saga into a Republican battle cry (Elian Gonzalez was a little Cuban boy who washed up on US shores in a raft in which his mother died. After weeks of to- and fro-ing between the US government and exiled members of the boy’s family, he was forcibly repatriated to Cuba to live with his divorced father. Sensing that Clinton was wounded by the Starr investigation into Cigargate, the GOP turned the boy’s ordeal into an anti-communist political circus, which effectively ended the quiet efforts Clinton’s administration had initiated with an eye towards opening up the Cuban relationship).

Now it appears that Obama has seized the moment to undertake a little glasnost of his own, perhaps because he senses that he has little to lose given the disloyal nature of the opposition (which will rant and rail at anything he does), perhaps because the US economy is doing well enough for him to feel immune on some aspects of foreign policy even after the adverse results of the midterm elections, and perhaps because, like gay marriage and medical marijuana, the US public has simply changed its views on Cuba over the years. In fact, it is likely a little bit of each, as the GOP and Fake News blowhards may not want to waste political capital on a dead issue that will gain the GOP no electoral traction. As it turns out, with the exception of some posturing clowns like Marco Rubio and the braying jackasses on conservative media outlets, the reaction from the political Right has been fairly muted.

It will be interesting to see what happens in the next few years. Back when I was dealing with Cuba, the word from their side was that everything was negotiable except for two pillars of the revolution: health and education. That is to say, the vaunted Cuban health and educational systems were sacrosanct and could not be touched in any post-Castro environment. Beyond that, market forces could dictate how Cuba would re-insert itself in the global economy. With an extremely literate, healthy and underemployed work force, it would seem that Cuba would be ideal for any number of value-added export commodity production ventures (textiles and pharmaceuticals have already become targets of foreign investor interest).

The other issue, left unresolved during my time working that beat, was the role of the Communist Party. It is clear that the Cuban political elite have been watching the transitions in the former socialist world, be it the USSR, China, Vietnam or Eastern Europe. They have also watched the experiments in indigenous socialism in Venezuela, Ecuador and Bolivia. It is pretty clear that they would prefer to do a China-style transition to state capitalism under one party rule.

The trouble with that preferred picture is that it is only a partial transition, with the political regime remaining largely the same while the economy changes. That may be possible in a huge country like China but is problematic in a small country like Cuba, especially when it is so proximate to a formerly adversarial super power and has a number of expatriates with ideas about Cuba’s future that do not include a dominant role for the Communist Party, much less its continued sole rule.

Thus the conundrum for the second and third generation Cuban Communist Party leadership is whether to embark on a sequential transition (first changing the economy then the political system, or, less likely, vice versa), or to go all in and mount a simultaneous transition of the economic and political systems. From the standpoint of keeping things peaceful and orderly, the best hope scenario is a sequential transition in which economic change precedes political change. Opening Cuba for business will present a formidable challenge for the Communist Patry, and the social and cultural influences that will come with diplomatic normalisation and economic opening will be hard to contain, much less stop. So whether by design or by the forced pace of change, it is likely that the Cuban political system will open up as a result of the economic transition and its superstructural ramifications.

The key is for the Cuban political elite to realise that the Chinese transition model is not possible for them given the circumstances, and that the days of one party rule will either come to a natural end or be overturned by force. In that light the best thing to do is to prepare a timetable leading up to multiparty competitive elections somewhere down the road, with appropriate guarantees put in place to preserve key revolutionary gains and to safeguard the institutional position of entities like the Revolutionary Armed Forces (FAR). That will take some doing, and could well take a fair bit of time given the current makeup of the Communist Party leadership (in which Fidelistas still hold significant influence along with Raulistas).

The question remains as to what will happen with the two pillars of the revolution in a market-driven economy. It also remains to be seen as to how Cuban society will respond to the introduction of full market logics on the island. Things like the elimination of food subsidies and introduction of merit-based employment criteria in and outside the public serve could prove painful for Cuban society. It could also lead to criminal opportunism in what some observers have already characterized as an increasingly amoral and feral civil society no longer wedded to the revolutionary ethos of the original 26th of July movement. If one thinks of where Cuba is spatially located in relation to drug trafficking corridors, the downside possibilities should be obvious.

Even so, the resumption of full diplomatic relations is a welcome development and hopefully followed by a formal end to the US embargo (not a certain thing, given opposition by GOP majorities in both the Senate and the House of Representatives). There still will be many hard days ahead as Cuba comes to grip with its post-revolutionary future, but at least the range of potential outcomes will be expanded relative to those extant up until a few days ago. As for the US, it demonstrates that sometimes diplomatic face-saving on foreign policy is a waste of energy and the better self-interested choice is to admit mistakes and move on. As the old Korean saying goes: a rich uncle can afford to be generous.

Although we in NZ have been preoccupied with our own national election, Fiji had one a few days earlier that arguably is far more important when it comes to that country’s long-term prospects. Much has been written about this foundational election and the transition from dictatorship to democracy, but in this 36th Parallel analysis I consider the possibility that Fiji may see Singapore as a developmental model worth emulating.

Military-bureaucratic authoritarian regimes often seek to legitimate their rule and establish a positive legacy by transferring power to elected civilian authorities. However, they do so only under certain conditions and with specific outcomes in mind. One way to ensure that their post-authoritarian vision is adhered to is to run a military-backed candidate (often a retired military leader) as the “official” candidate while actively working to use their control of the election process to promote divisions and disunity amongst the opposition. The way in which the elections are governed and the process leading up to them are used by the outgoing authoritarians to produce a voting outcome that upholds the status quo under elected civilian guise.

In spite of its dominant position in such “top-down” forms of electoral transition, military-backed candidates and/or parties are confronted with several dilemmas that complicate their ability to ensure their desired post-authoritarian outcome. In this 36th Parallel Assessments brief I point out two of them as well as some other political dynamics at play in such scenarios.

Although the analysis is framed broadly, it may be of particular interest to those interested in the elections scheduled for September in Fiji.

Over at 36th Parallel Assessments I explore some of the dynamics that are and will be key factors in the political transition to free and open elections in Fiji scheduled for mid 2014. Unique circumstances in Fiji notwithstanding, the success of a transition from military-bureaucratic authoritarianism to freely elected government (if not democracy) hinges on some key factors, particularly the interplay between regime and opposition hard- and soft-liners. The essay explains how and why.

I am sure that there will be plenty of eulogies, some fawning and some harsh, for Hugo Chavez. Since I spent a good part of my academic career writing about Latin American politics, to include the nature of national populists such as Chavez and a bit about his regime itself, I am well aware of his shortcomings and strengths. It is in the nature of national populism to be redistributive, mass mobilizational and increasingly authoritarian. As a left-wing variant, the Chavez regime was all of those things, and the fact that the US supported the 2002 coup against him only cemented the increasingly authoritarian direction of the regime. But his authoritarianism was mass rather than elite-based, and it was this mass support that carried him through three terms and four elections. He was no tin pot despot. His rule was a bit more complicated than that of, say, Robert Mugabe, who took a popular national independence movement and turned it into an armed clan-based kleptocracy.

The Achilles heel of national populism is the personalist nature of executive rule. Peron, Vargas, Cardenas and Chavez–all increasingly concentrated power in their own hands, thereby removing institutional checks and balances as well as clear lines of authority and succession. That could be the undoing of the Boliviarian experiment.

After the 2002 coup Chavez purged the military and civilian state bureaucracy of professionals and populated the upper ranks with acolytes. This decreased the efficiency and capabilities of state agencies, both armed and unarmed. He increasingly relied on Cubans for behind the scenes leadership of his internal security services, including his personal bodyguards. He played divide and conquer with his parliamentary counterparts at the same time that he re-jigged the constitution to increase the length of his presidential terms as well as the electoral prospects of his political party. He populated the judiciary with supporters and increasingly restricted freedoms of public expression and the press. He trained and armed supporter militias organized along the lines of the Cuban Auto-Defense Committees. Some of these have been accused of intimidating and assaulting members of the political opposition.

He used inclusionary state corporatist mechanisms of interest group administration that bestowed favor and patronage on supportive groups and excluded or punished non-supportive groups (which thereby polarized civil society organizations). This allowed for top-down direction of the thrust of state policy and funding directed at civil society, but it also gradually surpressed independent and autonomous expressions of grassroots interest.

All of this was justified on the grounds that he faced a disloyal opposition aided and abetted by hostile foreign powers, the US in particular. Although there is an element of paranoia in those claims, there is also a large grain of truth to them. The hard fact is that just the appearance of socialist inclinations on Chavez’s part sent the US into knee-jerk opposition, something that was particularly acute under the Bush 43 administration and was not undone once Obama was elected.

Chavez did much good for Venezuela, particularly in the fields of health, education, welfare and community organization. During his time in power infant mortality rates dropped and literacy rates increased dramatically. The percentage of Venezuelans living in poverty dropped from 50 percent to below 30 percent in ten years. Rural hospitals and schools were built where there previously were none. His regime kept the price of domestic petrol cheap (as it could as a major oil-producing and refining nation), which allowed the poorest segments of the population to weather rises in the price of imported commodities.

In spite of the claims of his detractors, he won four elections handily and relatively cleanly in the eyes of most international election observers. His tenure marks a major historical moment in Venezuelan life, and his legacy will be indelible on it. Whatever his authoritarian tendencies, he was no Pinochet or Somoza. Although his regime selectively repressed the opposition, it did not systematically torture or kill. Nor did it expropriate all private wealth, although it did seek to raises upper-income taxes, nationalize some strategic assets and prevent capital flight via financial controls. Needless to say, this earned him the emnity of Venezuelan elites and their foreign supporters.

He was a close ally of the Cuban regime, but given the common hostility of the US, that was born as much out of necessity than it was out of ideological affinity (truth be told, Raul Castro always thought of Chavez as a buffoon but Fidel was flattered by his attention and both were grateful for his cheap oil supplies. The Cubans worried that he would provoke a confrontation with the US that would suck them in and destabilize them).

He expanded Venezuela’s diplomatic, economic and military relations (towards China, Russia and Iran in particular, but also with other Latin American states) so as to counter-balance the traditional US-focused obsequiousness of his predecessors. He was the motor force behind the solidarity market Latin American trade bloc known as the Boliviarian Alliance for the Americas (ALBA), which among other things rejected IMF and World Bank financial prescriptions. He had significant Latin American popular and governmental support, which was mirrored in international media coverage.

He is alleged to have cultivated relations with Hezbollah and the Iranian Revolutionary Guard.

He presided over the deterioration of Venezuela’s core infrastructure, to include its oil production facilities (in which foreign investment dried up in response to his nationalization policies), as well as a dramatic rise in violent crime (Caracas has one of the highest murder rates in the world). He did not stop corruption but merely shifted it in favor of those who wear red berets. Venezuelan consumption of Scotch whisky, already the highest in the world when he assumed power in 1999, increased steadily from then on. He was unable to curb the Venezuelan obsession with female plastic surgery and beauty queens. So not all is well in the Boliviarian Republic. I shall leave it for others to debate the trade-offs involved and the pros and cons of his regime.

On balance, in the Latin American scheme of things Hugo Chavez was a relatively moderate caudillo (strongman) with a staunch independent and redistributive streak and majority popular support until the end.

The real problem at the moment is that his movement has no natural leader to succeed him. Moreover, he was the ideological glue of the regime: it was his vision, his praxis, the drew the course of events. With him gone the ideological basis of the regime is subject to interpretation by contending personalities and factions within the Boliviarian movement. His designated Vice President, Nicolas Maduro, has no independent power base, much less broad support within the Party. He has a serious rival in Diosdado Cabello, a former Army colleague of Chavez’s who is the head of the National Assembly. Cabello has support within the military, whereas Maudro’s support comes from within the union movement and public bureaucracy. Yet neither is visibly stronger than the other, so the backroom maneuvering and in-fighting has begun in earnest (and in fact began when Chavez returned to Cuba for surgery last December).

To this can be added the opposition, which rallied around the figure of Henrique Caprilles Radonski in the October 2012 elections that saw Chavez elected for the fourth time. A presidential election is supposed to be held 30 days after the public announcement of Chavez’s death (March 5). Riding a wave of grief, unity and solidarity, Maduro is the favorite to win that election if he is a candidate. It will be interesting to see if Maduro can maintain his grip on power before or after the elections in the absence of support for his mandate, however electorally affirmed. One thing is certain: Maduro is no Chavez, and everyone knows that.

Caprilles might not run in the immediate elections so as to delegitimize them and allow the Boliviarian in-fighting to proceed unimpeded and without a common political enemy to focus on. Whatever happens over the short-term, the bigger question is whether the Boliviarian experiment can outlive its creator. Can there be Chavismo without Chavez? Given the dynamics at play within and without the Boliviarian regime, the odds are not entirely favorable.

For the time being we will be treated to the grand spectacle of a Venezuelan state funeral, where the streets will be awash in red and the dignitaries will include a who’s who of US adversaries and critics, Hollywood leftists and very few heads of state from the developed capitalist world. As for Chavez–will his afterlife smell of sulphur or of something more pleasant?

The rejection of the 2013 draft constitution by the Baimimarama regime in Fiji (a constitution drafted by a panel of international jurists and partially funded by New Zealand), has led to speculation as to whether the promised 2014 elections will be held. What has not been mentioned in press coverage of the constitutional crisis is an end-game that is neither dictatorial or democratic: elections leading to a “guarded” democracy. In this analysis I outline some reasons why the prospect of a guarded democracy in Fiji should be considered to be very real.

In light of recent events involving the NZ Labour Party, it is worth pondering the phenomenon known as political fratricide and its sub-set, party fratricide.

Political fratricide is the tearing apart of a political movement or organization due to internecine differences amongst political allies or the ideologically kindred. It is fratricidal in that erstwhile brothers and sisters in political arms turn on each other over differences of ideas, strategy and tactics to the point that the movement can no longer sustain itself as a coherent political entity. The original movement is purged of dissenters by the dominant, and often increasingly authoritarian faction. Clear examples are provided by a myriad array of Left movements that fracture and split over ideological hair-splitting and matters of praxis. This weakens their broader appeal, segments them into marginal factions, and therefore diminishes their overall import in the political debates of the day. The more intense and acrimonious the political fratricide, the less likely a movement will recover its original shape and play an effective role in mainstream politics. In most instances that means permanent marginalization.

Party fratricide is a sub-set of this phenomenon. It is characterized by increasing cleavages, factionalization and fragmentation within political parties over any number of issues, including issues of leadership. Party fratricide results in the elimination or purging of losing factions. It is due to either of two reasons. One is irreconcilable differences within the Party on core beliefs. In this instance the very nature of the Party as a political entity becomes the subject of angry internal debate to the point that it can no longer function as a coherent whole. That forces splits and defections by discontented Party members that ultimately results in the formation of new Party off-shoots. As with the case of political movements, this dilutes the electoral strength of the original Party, which may or may not be replaced by one of its off-shoots as the preferred vehicle for the marshaling of a given political cause or belief system. Although the original Party may survive, its core belief structure will be modified by the defections and emergence of ideological competitors holding different conceptualizations of the original beliefs that once bound them together. That has the overall effect of diluting support for the belief system itself because the increased number of disputed interpretations resultant from the fratricidal process muddles popular interpretations of what the “pure” belief really is.

The second cause of Party fratricide is an absence of core values. In this instance, which often is seen in “catch-all” parties that seek to appeal to the widest array of interests possible, the absence of an ideological core leads to the narrow pursuit of segmented interests and policy implementation by a variety of internal factions. That in turn sets the stage for tactical opportunism, be it in the trading of favors via pork-barreling or log-rolling, or in regular shifting of support for policy positions or party factions based upon self-interest and the contemporary dynamics of the Party at any given moment. People of ideological principle finds themselves isolated and outflanked by the tactically astute who are less rooted in ideological conviction. The more this occurs the more likely that bitter personal antipathies develop within the Party as ambitious individuals joust for leadership roles in an evolving informal or subterranean contest that parallels the formal rules of Party leadership contestation and selection. Since there is no one central belief system to which all adhere, the field is left open for cunning tactical opportunists to hold sway in internal party debates.

This appears to be what has happened to the Republican Party in the US, and it shows signs of occurring in the Australian and British Labor/Labour parties. It seems to be what happened to ACT. These parties contest power not out of a core belief system but because of the platform of temporally shared policy interests that they represent. Although that may suffice to win power or office, it also is a source of constant internal tension that has the potential to explode into outright conflict should personal animosities or policy differences turn irreconcilable.

Party fratricide does not necessarily spell the death of the Party but is a sign not only of deep division within it, but of fundamental weakness. After all, if a Party cannot unite around a common set of objectives, leaders or beliefs in the face of a coherent and well-organized opposition, then it is less a political Party than an amalgam of sectoral interests forced together by political circumstance and shallow ideological affinity.

All of this is quite obvious. The question for the day is whether a Party that is exhibiting signs of fratricide can pull back and regroup in a manner that retains its coherence and effectiveness as a political interlocutor. One way may be to rehabilitate, resurrect or recruit again those that have lost favor or been relegated by the internecine battles (many a political Laxarus has been returned to the fray in NZ and elsewhere). There are a number of other means for re-constituting a coherent political platform and leadership cadre that enjoy the support of the Party membership as a whole. Thus the solution set to the problem may be as varied as it is difficult, but for one NZ political party at least, it is also absolutely necessary.

My yearly sojourns to the US provide a regular opportunity to garner a snapshot of the state of the union, at least from my limited perspective. This year I returned to my old stomping grounds in the desert southwest and to the home away from home in South Florida. After a wet monsoon season the desert was lush and the 360 degree skies saturated with cumulus, cirrus and stratus cloud. It was great to hear Norteno music and Spanglish spoken in the street.

My son joined my partner and I for a trip to the old mining town of Bisbee, where we stayed at the haunted Copper Queen (est. circa 1880) and had a long night on the town that ended up in some biker/metalhead dive bar. It was great. I highly recommend the Arizona desert to New Zealanders interested in a dramatic contrast in landscapes and Western cultures.

South Florida has been less pleasant. There is a palpable tension in the air marked by hostile attitudes and unbelievably aggressive, to the point of criminally reckless, driving. The region is known for its fast pace and shallow materialism, but in this trip there is something darker about it. Some of this can be attributed to the election campaign, in which some of the local attack ads are truly astounding in their ferocity and disregard for decency (the issue is large: one-third of the US Senate, the entire US House of Representatives, and most local offices are in play). There is a buffoon Republican named Alan West running for the US Senate, and his ads make the Swiftboat and Willie Horton attack ads look tame. He says nothing about what he proposes and spends most of his time defaming his Democrat opponent. Seeing that Romney is set to lose the presidential race, the right wing talkback and television outlets have ratcheted up the hysteria and vitriol to the point that even John Stewart or Stephen Colbert cannot parody them adequately. In a word, the place is nuts.

This condition of political anomie may be compounding the sense of frustration and anger felt by an increasingly divided–the word “polarized” does not do justice to the chasm between the US right and left–polity that more than anything else is diffident in its regard for politics. Both the Republican and Democratic conventions were not as well attended and not as widely viewed by TV audiences as in previous years, and it appears that the election abstention rate is going to be very high this year. People appear to be cynical, bitter and lacking in hope for the future regardless of who wins in November. All in all, this is the sorriest state of mind I have found the US to be in since my move to NZ fifteen years ago.

That is the backdrop to the subject of this post. As readers will know, the focus of the 2012 US election begins and ends with the economy. Platitudes are proffered and panaceas are prescribed. Words like “competitiveness” and “innovation” are bandied about like lollies. But there seems to be a fundamental misunderstanding of a root cause of the American economic malaise: its reliance on services.

The US is a country dominated by the service sector rather than true productive enterprise. Think of the variety of services now on offer: wealth and asset managers; financial advisors; PR and other “communications strategists;” personal trainers; life coaches (of which there are half a million in the US); pain management specialists (aka pill doctors); landscapers; floral designers; escorts; private alarm and security companies; fishing, hunting and tour guides; real estate agents; internet and in-store movie suppliers; credit card purveyors; nail and hair “artists;” wedding planners; a zillion types of mental health counselors and ambulance chasing lawyers; insurers; car, cat and dog groomers; dog walkers; bird, cat, dog and horse whisperers; DJs; car valets; (for-profit) drug and alcohol rehabbers; tennis instructors; beauty consultants; fashion stylists; liposuction specialists; motivational speakers; management and risk consultants; self-help gurus; personal assistants and agents, accountants; home delivery services; website designers–the list is as varied as it is endless. While one might argue that all retail sales are a service, my point is that in the US the extent of service provision is on its way to infinite, and this infinite progression dominates its economy.

The basic problem of reliance on services as the core of economic activity is that making money through facilitation is not equivalent to being productive. Nor is working hard synonymous with productivity. Americans work the longest hours and take the shortest vacations of all OECD countries. By that standard they should be light-years ahead of the democratic capitalist world in terms of real productivity. But they are not. That is because hard work and income earned in services does not, in the larger scheme of things, add real value to productivity. It may make the national quality of life better, but it does not advance the overall condition of the productive apparatus. It is the economic equivalent of silver–it is nice and attractive, very malleable, easy to buy, wear and replace, but is no substitute for the economic iron required to build and progress a nation.

What is noteworthy about the US service sector is that, at over 75 percent and growing, it is steadily occupying a bigger and bigger percentage of the national GDP (agriculture is less than 2 percent and manufacturing is at 20 percent). The creative genius involved in the proliferation of services is matched by its relentless rent-seeking: in South Florida television ads are dominated by ambulance chasers (who prefer the term “personal injury lawyers”), pill-pushers and geriatric care providers who offer relief and compensation for a myriad of ills previously unheard of or for which personal responsibility used to suffice.

The majority of US college graduates, be they from two or four year colleges, receive degrees in areas other than science or engineering (business, education and liberal arts degrees are the majority of those granted in the US). Since the bulk of undergraduates do not go on to graduate school, this leaves a labor pool full of people who cannot actually produce or add value to anything other than by virtue of their slick talk and quick uptake on the job. Since most people coming out of US universities and colleges are neither particularly articulate or quick on the uptake, their default option is to join the legion of personal service providers.

No that all services are of the silver variety. Some of these are important, such as electricians, plumbers, carpenters, doctors, firefighters, police and lifeguards (I shall defer from elaborating on the public versus private aspects of the service sector, but note that what are considered public services are basically considered to be core functions of government, many of which are being privatized and downsized in the current fiscal environment). Many services are linked via supply chains to the manufacturing and research sectors. Others, such as the information technology services that spawned Google, Facebook and Twitter, create wealth but do not always really produce anything tangible or contributory to the value-added project (which in part explains the lukewarm stock market reaction to the Facebook public stock float). The vast majority of US services are, needless to say, even less contributory to the national productive apparatus.

The critical and deleterious aspect of the services domination of the US economy is that it is moving the country away from the production of real value added assets, much of which is increasingly monopolized in terms of ownership anyway. Add to that the overwhelming influence of the financial service sector, and what is left is a country that buys more than it makes (and what it makes are increasingly capital goods as much as consumer durables and non-durables), and in which people increasingly use services rather than do things or rely on themselves.

The social division of labor created by service sector dominance in the US appears to produce two distinct cultural characteristics. First–and this is very evident in South Florida and a subject that I have addressed in previous posts–is a culture of blame-assignment and responsibility-shifting where nobody is personally accountable for the consequences of their actions. Even hardened criminals commonly use the excuse that their teachers, counselors and psychiatrists failed them in the lead-up to their crimes, and in many instances this suffices to mitigate their culpability and reduce their sentences. They are not alone in this. In fact, there is an entire service industry comprised of counselors, insurers and lawyers that profits from shifting blame and responsibility, criminal or not.

The second aspect is the increasing compartmentalization and personalization of service work, which in turn produces an erosion of horizontal solidarities brought about by common insertion in the productive process. Much of the service sector is characterized by individual entrepreneurial or material pursuits. The individualization of service work, often aided by stay-at-home technologies that facilitate the rendering of such services, removes the associational and emotive ties that are part of the working experience in mass productive enterprise. This atomizes and alienates individuals as social subjects, as their material fortunes no longer depend on common identifications and sense of purpose (which occurs whether the workforce is organized or not precisely because it is a collective enterprise).

Social group associations, service group size and individual immersion in non-work related collective undertakings such as sports and churches mitigate against a complete return to survivalist alienation, but they do not fully overcome the dissociative effects of the nature of service provision. The effect of this is to reduce the ties that bind people together, which helps explain the turn to shifting blame and responsibility onto others.

Needless to say, I am only extrapolating from what I am seeing in the US during my limited time here. I recognize that generalizations are fraught and speculation based on fraught and fragmentary generalizations are to be suspected. So take this appraisal as an opinion, nothing more. Moreover, the US remains the largest national economy in the world, the largest trading nation, and the largest manufacturing economy. Its information technology, robotics, telecommunications and aerospace industries are world leaders. Its automobile and construction sectors are on the rebound. It is by no means weak in spite of what I have outlined above.

Even so, the trend is disturbing (at least for those with an interest in the US). For small countries not intent on projecting power or devoid of natural and human resources, reliance on services as the mainstay of the economy is acceptable if not advisable. Competitive advantage in services may counterweight a lack of comparative advantage in productive resources.

However, it seems to me that if a large, militarily aggressive country with a global reach relies on services as its engine of economic growth rather than on value-added production, than it will find it increasingly difficult to hold the its position over time. I might be wrong and, like (but better than) the USSR, the US can continue to ride on the production associated with an immense military-industrial corporate complex that spins off technological innovation and civilian applications as a matter of course even as the overall presence of value-added manufacturing as a component of GDP decreases. But if that is the case, it seems a risky proposition for sustained growth and global prominence given that an increasing percentage of the inputs to that type of production are derived from external rather than internal sources.

Meanwhile the life coaches continue to facilitate personal self-realization, realtors hustle properties, lawyers litigate and asset managers channel money made from services into other services. Wall Street and Washington both believe that ongoing reliance on services for economic growth is sustainable and desirable. In broad economic terms, that is like equating a merry-go-round with a wheel. It is that merry-go-round that Obama, Romney and other US politicians are trying to fix.